Bitcoin’s (BTC) price has corrected more than 12% , trading around $21,000 press time.
On-chain data provider has shared a detailed analysis explaining the weakness during the relief rally. Glassnode points out that the participation of B2C players was lacking during this relief rally answering the total number of less than $10k transactions.
As per the Glassnode data, when the Bitcoin price jumped back to $24.4K, the transaction volumes for retail investors were still heading against BTC price. This lack of retail interest marks the weakness in the market.
Blockchain data provider Glassnode explains: the cyclical behavior of BTC prices to the USD-denominated inflows and outflows at the exchanges. They states:
“Exchange flows have now declined to multi-year lows, returning to late-2020 levels. Similar to the retail investor volumes, this suggests a general lack of speculative interest in the asset persists.”
One thing is clear, with the lack of retail participation, the network demand and activity on the BTC blockchain were lacking severely. Furthermore, Glassnode points out at the Net Realized Profit/Loss (90DMA) explaining that sellers are yet not exhausted in the recent bearish market.
Looking at the last bear cycles of ’18-’19, the Net Realized Profit/Loss (90DMA) should came back to neutral to suggest any price recovery.
Finally, Glassnode data provider speaks of the Short-term holders’ SOPR (90DMA) which explains the ratio of investors’ selling prices relative to their buying prices. The important threshold here remains the cross-over of 1. Any break above it would indicate a return to profitable spending.
“Following the capitulation from the November ATH, short-term holders (top buyers) realized heavy losses, causing a sharp drop in Short-Term Holders SOPR (90DMA) below 1. This phase is usually followed by a period of low conviction, where the break-even value of 1 acts as overhead resistance.”
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